Making sense of the economic contribution of international students in Australia (up to 2008)

accesseconcover1The latest contribution to assessing the “economic contribution” of international students to Australia’s economy was released last week. The informative report, titled The Australian Education Sector and the Economic Contribution of International Students, was prepared by Access Economics on behalf of the Australian Council for Private Education and Training (ACPET).

The executive summary of the 35 page report notes, amongst other things, that:

  • Education services ranks as the third largest export category earner for the year 2007-08, behind coal and iron ore.
  • Each international student (including their friend and family visitors) contributes an average of $28,921 in value added to the Australian economy and generates 0.29 in full-time equivalent (FTE) workers. Overall, this sees international students, and the associated visitation from friends and family contribute $12.6 billion in value-added.
  • The share of education-related travel services has increased from around one per cent of total services exports in the early 1970’s to 27 per cent in 2007-08.
  • International student expenditure in Australia contributes to employment in the Australian economy. It is estimated to have generated just over 122,000 FTE positions in the Australian economy in 2007-08, with 33,482 of these being in the education sector. Total student related expenditure (spending by students and visiting friends and relatives) generates a total of 126,240 FTE positions.

I’ll paste in a sample of tables and graphs from the report below:

accessecontable51

accessecontablea

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Please keep in mind, as noted in our 24 June 2008 entry ‘Analysing Australia’s global higher ed export industry‘, that higher (tertiary) education is one of several contributing ‘education’ activities to producing export earnings:

  • Higher Education
  • English Language Intensive Courses for Overseas Students (ELICOS)
  • Vocational Education and Training (VET)
  • Schools
  • Other Awards Sectors (e.g., “bridging courses and studies that do not lead to formal qualifications”)

The development of capacity to assess the economic impact of foreign students is part and parcel of the denationalization and commercialization process. Capacity to analyze and hence constitute this new services sector – a fast growing ‘industry’ in the views of many stakeholders – is strikingly variable.  In my view Australia and New Zealand have gone the furthest down this path, and it is therefore worth understanding how the Australasians approach this issue from an analytical (economic impact assessment) perspective.

It is also important to understand which institutions are emerging as key knowledge brokers regarding the economic contribution of international students.  As the New Zealand (see ‘Measuring the economic impact of ‘export education’: insights from New Zealand‘) and Australian cases suggest, private consulting firms made up of economists (some of whom used to work for federal/national governments) are key actors. There is, thus, a symbiotic relationship between the state and the private sector when it comes to analyzing the evolving nature of the services sector of the economy; one becoming increasingly associated with, in policy and analytical senses, education institutions and development agendas.

In addition, as in this case, we see an association of private sector providers contracting out to have this report developed.  The ACPET is “the national industry association for independent providers of post-compulsory education and training, for Australian and international students”, including:

  • Higher Education
  • Vocational Education and Training
  • English Language Courses
  • Senior Secondary Studies
  • Foundation Studies
  • The ACPET Mission is to:

    Enhance quality, choice, innovation and diversity in Australian education and training for individual, national and global development. Work pro-actively and co-operatively with government, education and training providers, industry and community organisations, in order to ensure that vocational and higher education and training services provide choice and diversity, and well-targeted, appropriately delivered courses which are widely accessible and of high quality.

One proxy measure of ACPET’s make-up is its broad of directors, highlighting how non-university “post-compulsory education and training” actors are also becoming dependent upon foreign students in countries like Australia; a structural position that leads them to institutionalize and create an International Education Committee, which then coordinates the production of reports such as this via the expertise of Access Economics.

Given the dependency dynamic, reports such as these are both analytical devices, but also tools for lobbying.  Reports such as The Australian Education Sector and the Economic Contribution of International Students are increasingly available for downloading in PDF format, which enables wide circulation via email.  Traditional releases to media sources continue, as well: see, for example, ‘Learning boom amid the economic gloom‘ in The Australian.

As noted in the introduction to a recent guest entry (‘Measuring the economic impact of ‘export education’: insights from New Zealand‘), we are in the early stages of seeking a series of national viewpoints on how countries approach the export earnings issue. We would be happy to entertain proposals for guest entries on this issue, regardless of how well formed your own country’s capacity is to make sense of the data that is (and is not) available.

Kris Olds

Update: nanopolitan (‘Coal, iron ore, and education‘) makes the noteworthy point that “adjusted for population, Australia (21.7 million) hosts five times as many students as the USA (306.2 million)”. It might be worth adding that, according The Australian (‘Indian students boost the export economy‘, 2 April 2009) “Indian students now make up almost 18 per cent of Australia’s total foreign student population, the second largest group after China, which represents 23.5 per cent of the total foreign student body”.

Update 2: thanks to Brett for the links (see Comments) to two new news stories re. ‘Australian immigration launches probe on 20 colleges teaching international students for supply of fake education and work certificates necessary for the obtainment of permanent residency’.

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8 thoughts on “Making sense of the economic contribution of international students in Australia (up to 2008)

  1. Pingback: Debating the possible decline of the USA’s attractiveness to foreign students and highly skilled foreign professionals « GlobalHigherEd

  2. Pingback: Economic benefits of international education to the United States « GlobalHigherEd

  3. Pingback: Measuring the economic value of Canada’s international education “industry” « GlobalHigherEd

  4. Pingback: Taking note of export earnings « GlobalHigherEd

  5. In response to the question you posed about why analyses of the impact of global education are different and patchy: I know this isn’t really what you were asking, but I have trouble imagining the usefulness of any attempt to quantify the economic values of education. Well, I’ll be more cautious: I’m sure quantification can contribute to the debate. But what about all the complex systems, particular histories, and bio-artistic performances required just to walk down the street, for which we still don’t have much computer time? What about the fact that vocationally-oriented “majors” are time and again proved to be less effective in training students for that very vocation than the liberal arts? How will we quantify the fact that the import of our educations really is lifelong?–it can take us five years to realize the significance of this experience, ten years to realize the significance of that one. To confine policy-making to what can be quantified will only ensure that our economies will be deprived of the creativity needed to move them along.

  6. I agree with you Aranye. In the UK at the current time there is an attempt to codify/qualify the ‘impact’ that university research has on the various communities that it might be aimed at. All grants from funding councils will need to build in this dimension – what ever ‘this dimension’ eventually comes to mean. This seems to me to run into the same kinds of difficulties, and hazards, that you have identified concerning the value of education.

  7. Pingback: The economic impact of international students around the world « GlobalHigherEd

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